Bass Coast taps reserves as budget gap widens

Bass Coast Shire Council has endorsed a draft budget of $124.6 million for the 2026-27 financial year that proposes drawing $8 million from reserves and cutting $7.5 million from planned capital works as it battles rising costs on multiple fronts.

The draft was endorsed at Wednesday’s council meeting and is now open for community consultation with submissions closing on May 8.

Even with the reserve transfer and capital works reduction council is still projecting to spend $4.3 million more than it receives.

Council was already facing a tightening financial position from years of rate capping running below inflation and what it described as cost shifting from other levels of government.

The Iran war and effective closure of the Strait of Hormuz since late February has compounded those pressures by driving global fuel prices sharply higher in what the International Energy Agency has called the largest supply disruption in the history of the oil market.

The flow-on effects have added significant cost to delivering capital works and running day-to-day council operations with hundreds of petrol stations across Australia already reporting fuel shortages.

Council acknowledged the full impact of the global economic uncertainty on project delivery costs and operational expenditure was not yet known and said the budget remained under constant review.

Bass Coast Mayor Cr Rochelle Halstead said the budget had been carefully developed in a challenging environment.

“This budget is about getting the balance right,” Cr Halstead said.

“We are delivering the services our community relies on every day while continuing to invest in the infrastructure that keeps Bass Coast liveable.

“We know households are feeling cost of living pressures and council is working within a tightly constrained environment including the State Government rate cap.”

The budget includes an $88.6 million operating budget and a reduced $30.3 million capital works program funded within a 2.75 per cent rate increase in line with the State Government’s rate cap.

The rate cap sits below the current inflation rate of 3.6 per cent continuing a trend that has seen the cap trail inflation for four consecutive years.

Key capital works include $3.6 million for the Cowes Streetscape Master Plan, $7.7 million for waste management infrastructure, $2.8 million for tracks and trails including the Inverloch to Wonthaggi trail and $4.2 million for road renewals.

Council has maintained its community grants scheme and introduced a Pensioner Waste Rebate initiative.

“Beyond the immediate volatility of fuel prices council continues to operate within an increasingly challenging structural environment for local government across Victoria,” the officers’ budget report states.

“The compounding effects of rate capping, persistent inflation and the ongoing challenge of cost shifting from other levels of government place immense strain on the sector’s financial capacity.”

Bass Coast was already battling sector-wide underfunding which it said recently impacted 19 low-rating councils including itself more than most following the introduction of the Fair Go Rating System in 2015.

Cr Halstead said council would continue to advocate for fairer funding.

“We must remain financially responsible while continuing to advocate strongly to state and federal governments for fairer funding to support regional communities like ours,” she said.

Council will host consultation sessions including an online session on Thursday April 23 and drop-in sessions at Wonthaggi Town Hall on Tuesday April 28, Coronet Bay Community Centre on Wednesday April 29 and the Phillip Island Visitor Information Centre at Newhaven on Wednesday April 29.

Submissions close on May 8 with a hearing of budget submissions scheduled for May 13. Details are available at engage.basscoast.vic.gov.au.